Commodity Blog

Commodity news, technical and fundamental analysis, market data on precious metals, energies, industrial metals, and soft commodities


Gold Dips, Palladium Soars Ahead of Key June Fed Meeting

June 12, 2017 at 16:59 by Andrew Moran

Gold futures fell on the first trading day of the week as investors prepare for a key Federal Reserve policy meeting this week. The yellow metal still has been unable to benefit from last week’s important events, including the surprising election results in the UK and the European Central Bank (ECB) leaving interest rates steady.

August gold futures tumbled $2.80, or 0.22%, to $1,268.80 per ounce at 16:40 GMT on Monday. Gold prices have declined three straight sessions and posted a weekly lost for the first time in five weeks last week.

Silver, the sister commodity to gold, is also slipping on the week’s opening trading session. July silver futures slid $0.30, or 1.76%, to $16.92 an ounce. Silver recorded a weekly loss last week and has been pummeled since the beginning of the month.

The Fed will hold its two-day Federal Open Market Committee (FOMC) meeting on Tuesday. According to the CME Group FedWatch tool, there is a 99% chance that the US central bank will pull the trigger on another rate hike, keeping the Fed on track for three rate hikes in 2017. Gold is sensitive to a rising-rate environment because it lifts the opportunity cost and sends traders into yield-bearing assets.

Central banks are having a busy June. The ECB announced that it was keeping its low rates unchanged. The Bank of Japan (BOJ) and the Bank of England (BOE) will issue policy statements later this week.

Gold was further impacted by a climbing US dollar. The greenback jumped 0.03% on Monday – the dollar reported a 1% increase last week, which is the currency’s best weekly showing in months. A strong US dollar is bad for commodities like gold and silver because it makes it more expensive for foreign investors to buy.

The yellow metal was overshadowed by palladium’s dramatic rise. September palladium futures spiked $10.25, or 1.2%, to $866.45 an ounce, a 16-year high. The major metal has surged for 11 of the past 12 trading sessions, and experts suggest it still has room to grow because of a supply and demand issue.

If you have any questions and comments on the commodities today, use the form below to reply.

Leave a Reply